Working Paper: NBER ID: w22376
Authors: Marius Brlhart; Jonathan Gruber; Matthias Krapf; Kurt Schmidheiny
Abstract: We study the effects of wealth taxation on reported wealth. Our analysis is based on data for Switzerland, which has the highest rate of annual wealth taxation in the developed world. While the wealth tax base is defined at the federal level, tax rates vary considerably across locations and over time. We use aggregate data on wealth holdings by canton and individual-level data for the canton of Bern. Our estimated behavioral elasticities substantially exceed those of the taxable income literature. We also find that taxpayers bunch below the tax threshold, that observed responses are driven by changes in wealth holdings rather than mobility, and that financial wealth is somewhat more responsive than non-financial wealth.
Keywords: Wealth Taxation; Behavioral Elasticities; Switzerland; Tax Policy
JEL Codes: H21; H31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Wealth Tax Rate Increase (H29) | Reported Wealth Holdings Decrease (D31) |
| Wealth Tax Rate Increase (H29) | Bunching Behavior Below Tax Threshold (H31) |
| Wealth Tax Rate Increase (H29) | Adjustments in Reported Wealth (E21) |
| Wealth Tax Rate Increase (H29) | Wealth Accumulation Impact (E21) |
| Income Tax Rate Increase (H29) | Reported Wealth Holdings Decrease (D31) |
| Wealth Tax Rate Increase (H29) | Financial Wealth Impact Greater than Non-Financial Wealth (G59) |